Don’t blame landlords for the housing crisis, government must build more – John Blackwood

For some time now, ­concerns have been raised about rising housing costs and the lack of affordable housing in Scotland. Therefore, it is not surprising that our politicians in the ­Scottish Parliament have focused their ­attention on tackling the thorny issue of the cost of renting.
John Blackwood, chief executive, Scottish Association of Landlords.John Blackwood, chief executive, Scottish Association of Landlords.
John Blackwood, chief executive, Scottish Association of Landlords.

Over the next few months the ­Scottish Parliament will be hearing views from both landlord and tenant about rent levels and the impact this has on the ability of tenants to find an affordable home.

While this is a political minefield for many, it is an issue which politicians and governments have evaded for decades, resulting in a gross underinvestment in housing in Scotland and the wider UK. When we hear stories about how the private rented sector has more than doubled in size in the last 15 years and how landlords have grasped the opportunity to invest in a lucrative sector, it is easy to blame the private landlord for the housing crisis. But let us take a step back for a moment – rather than play the blame game, let’s try and find real and ­sustainable ways to tackle the ­problem.

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The issue of rising rents is not only an issue for tenants renting from private landlords but also for those renting from housing associations and local authorities where, according to official Scottish Government statistics, we have seen a cumulative increase in rents of 12.2 per cent between 2013/14 and 2017/18, which equates to a real terms increase of 6.9 per cent (i.e. an increase of 6.9 per cent over and above CPI inflation of 5.3 per cent over these years).

While it is much easier to get ­accurate rental data on housing ­association and local authority rents, as they are collated by the Scottish Housing Regulator, there is no such body for the private rented sector and therefore getting access to accurate data on existing rents is difficult.

The Scottish Government’s own statistics on the private rented ­sector highlight that the data is largely ­gathered from advertised rents and not existing tenancies.

In 2018, Shelter Scotland produced a very useful evaluation of rent ­regulation measures within ­Scotland, which highly criticised the quality of data being drawn upon to make policy and legislative decisions. What policy makers need to focus on is how to get accurate data in order to determine the extent of the problem there is believed to be with rising rents. Emotive a subject as this is, it is not in the interests of landlords for rents to spiral out of control as this invariably results in tenants being unable to afford to pay, increasing rent arrears and debt which no doubt would result in eviction – all of which increases costs to landlords and ­distress to tenants.

Basic economics tells us that by increasing supply to meet demand costs to the consumer are reduced. This same philosophy could be applied to increasing the supply of affordable housing to see the cost of renting decline. But this is not the job of the private landlord, it is for our politicians and governments to take action and invest in more ­affordable homes to take pressure off the ­private sector. After all many tenants ­currently have no option but to rent privately. Shouldn’t the ­objective be to provide the choice of more social housing for those who need and desire it?

Of course, new social housing comes at a cost, but surely it is worth us as a society to invest, ensuring that everyone has a right to a home. It is critical that we have an ­adequate ­supply of housing to meet the demand at a local level, thus ­reducing the ­pressure on rents in key ‘hot-spots’, these being primarily in our big cities.

This combined with accurate rent data can help us determine the need if any for rent controls and how we would go about not only legislating for but also policing rents. According to Shelter’s report, ‘rent controls of any kind offer a useful stop gap, a breathing space, but it is not a ­long-term solution to rapidly rising ­private rents’.

I understand that no one will lose any sleep worrying about a landlord getting less rent every month, but landlords are investors and they can make the business choice to leave the sector if it is not a good business for them. That further reduces housing supply.

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Surely it is much better to determine the extent of the problem first, before legislating and, heaven forbid, we return to the bad old days of the slum landlord because tenants have nowhere else to live. Let us learn the lessons of the past and build a private rented sector that tenants choose rather than being forced to live in.

John Blackwood, chief executive, Scottish Association of Landlords.

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